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Vietnamese heroin importation syndicates dismantled

Image of heroin and needle

The following two cases, detailed in Part A and B, describe the activities of two suspects who worked with other criminal syndicates to import heroin from Vietnam into Australia. AUSTRAC information allowed law enforcement agencies to trace the various syndicates’ financial activity, identify syndicate members and establish links between them and a wider network of syndicates.

Part A describes how AUSTRAC information revealed to authorities one syndicate’s money laundering methodology through an Australian casino. Part B demonstrates how AUSTRAC analysis revealed links among a network of drug trafficking crime syndicates.

Part A and B are separate law enforcement investigations. The two cases are presented together to demonstrate how the use of AUSTRAC information was able to establish previously unknown links between suspects and crime syndicates.

Part A

AUSTRAC provided financial transaction reporting and associated analysis to law enforcement agencies which was instrumental in dismantling an international drug importation syndicate operating in Australia.

For a number of years, the syndicate had been importing heroin of the highest purity from Vietnam. Drug couriers brought the heroin into Australia by concealing it internally.

The syndicate used a consistent methodology for recruiting drug couriers and smuggling the drugs into Australia:

  • The syndicate generally recruited individuals of Vietnamese descent who were in some form of gambling-related financial difficulty.
  • The syndicate coerced these individuals into becoming couriers by providing them with loans until, eventually, they owed so much money to the syndicate they were forced to act as drug couriers to pay off their debts.
  • When a courier was recruited, the syndicate would seek approval from members of another interstate drug syndicate to undertake a drug importation.
  • Once the interstate syndicate approved, the main syndicate would give the newly recruited drug courier an advance of AUD5,000.
  • Before the couriers flew out of Australia, the syndicate would provide them with a Vietnamese mobile telephone number and instructions on how to contact individuals on arrival in Vietnam.
  • Once the courier had obtained the drugs, they would smuggle the drugs internally back into Australia where they were met by the main suspects who would assist with the removal of the drugs and then arrange distribution.
  • Couriers were also used to smuggle drugs within Australia, by transporting the drugs internally on domestic flights for delivery to syndicate members and other syndicates located interstate.

AUSTRAC received suspect transaction reports (SUSTRs) relating to the syndicate’s activities at a casino. The SUSTRs showed the main suspects regularly provided gambling chips to the value of AUD5,000 or AUD10,000 to unidentified third parties. These third parties would then cash the chips after limited gambling activity. This activity was an indication that the main suspects were using the third parties to launder illicit funds through the casino on their behalf, or were using the casino as a venue to covertly pay members of the syndicate.

AUSTRAC found that no cash threshold transaction reports (TTRs) had been submitted to it in relation to the syndicate’s activities at the casino, despite the high volume of funds the suspects had been moving through the venue. This suggested to authorities that the syndicate had been ‘structuring’ its cash transactions into amounts of less than AUD10,000 to avoid the threshold transaction reporting regime.

AUSTRAC information also included reports of a number of international funds transfer instructions (IFTIs) conducted by the main suspects to beneficiaries in Vietnam, totalling approximately AUD27,000.

The investigation led to four suspects being arrested and charged with various drug offences and the seizure of an estimated AUD5 million worth of drugs. The suspects were convicted and sentenced to terms of imprisonment ranging from three to 11 years.

Offence

Drug trafficking

Customer

Individual

Industry

  • Banking (ADIs)
  • Gambling services

Channel

  • Electronic
  • Physical

Report type

  • IFTI
  • SUSTR

Jurisdiction

International – Vietnam

Designated service

  • Account and deposit-taking services
  • Gambling services

Indicators

  • Gaming chips given to unidentified third parties who cash the chips following minimal gambling activity
  • High volumes of cash moving through accounts belonging to persons of interest at gaming venues
  • Individuals structuring funds when cashing chips to avoid reporting requirements
  • International funds transfers to high-risk jurisdictions and individuals of interest to authorities
  • Unusual gaming activity

Part B

AUSTRAC information assisted an investigation by identifying previously unknown entities and links between a crime syndicate and a network of other drug syndicates operating in Australia, including the syndicate described in Part A. As a result, Australian law enforcement agencies were able to dismantle a number of the syndicates within the network.

Similar to the activity in Part A, the primary syndicate imported heroin from Vietnam to Australia using drug couriers concealing the drugs internally. This primary syndicate also sourced large amounts of heroin from a second drug syndicate, which operated in a different Australian state.

At the request of the investigating law enforcement agencies, AUSTRAC produced a number of intelligence assessments which analysed various aspects of the primary syndicate’s financial activities. AUSTRAC information enabled law enforcement to identify and link Suspects A and B. Both these suspects were members of the second syndicate and major suppliers of drugs to the primary syndicate. Suspects A and B also had strong links to a third syndicate – the subject of Part A of this case study.

AUSTRAC information revealed that:

  • members of the primary syndicate made five international funds transfers (IFTIs) to entities in Vietnam, worth approximately AUD35,000. The majority of funds were sent to Suspect A, who was also the beneficiary of several additional IFTIs sent from Australia to Vietnam by other individuals linked to the drug syndicates.
  • AUSTRAC received a suspicious matter report (SMR) reporting an unusually high increase in the annual winnings at a casino by one of the main suspects of the primary syndicate. This unexplained wealth suggested that the suspect was receiving additional income from unknown sources.
  • Suspect A appeared to be in control of a number of syndicates which were all part of an extensive drug trafficking network. This included the primary syndicate and the third syndicate (which was analysed in Part A).

Suspect A was known to travel between Australia and Vietnam, with family members in Vietnam who were part of the operation.

As a result of the law enforcement investigation, suspects A and B were arrested and charged with drug offences.

Offence

Drug importation

Customer

Individual

Industry

  • Banking (ADIs)
  • International funds transfers

Channel

  • Electronic
  • Physical

Report type

  • IFTI
  • SMR

Jurisdiction

International – Vietnam

Designated service

Account and deposit-taking services

Indicators

  • Customer involved in high-value funds transfers, which are inconsistent with expected/established financial activity for the customer (i.e. unexplained wealth)
  • Customer making regular international funds transfers of significant values to high-risk jurisdictions
  • Multiple customers conducting international funds transfers to the same overseas beneficiary
  • Unusually high increase in annual winnings from gaming activities
Last modified: 30/07/2015 15:34